1.(C) Summary: National Security Advisor M.K. Narayanan told Senators Russ Feingold and Bob Casey May 30 that the U.S.-India relationship amounts to much more than just trade links and defense deals, but rather benefits from a mutual empathy. Asked about terrorism, Narayanan related that training camps on the Pakistan-Afghanistan border have attracted more "white faces." He also noted jihadi groups have attempted to acquire fissile material and have the technical competence to manufacture an explosive device beyond a mere dirty bomb. Narayanan lamented that national intelligence agencies lack a common understanding at a time when an incident such as the 2006 blasts in Mumbai involved planning and fundraising in up to 11 different countries. Regarding the May 13 blasts in Jaipur, Narayanan divulged that India has narrowed the suspects to the Harkat-ul-Jihad Islami (HUJI). On Iran, Narayanan asserted that India also wanted to prevent a nuclear weapons program, but he criticized the use of sanctions as ineffective, given the "unique" Shi'ite ability to absorb punishment. Narayanan relayed the government's intention to maintain a dialogue and normalize relations with Pakistan, as shown by the effort to play down the increase in cross-border infiltration in recent weeks. End Summary.

Motorcycles for Mangos - - -

2.(C) Senator Russ Feingold began the May 30 meeting with Senator Bob Casey and National Security Advisor M.K. Narayanan by urging a reduction in tariffs on Harley Davidson motorcycles. Narayanan responded that the Prime Minister is "the most liberal economist you can think of," and he promised to pass the message to him and other relevant officials.

U.S. and India Have Natural Empathy - - -

3.(C) Narayanan remarked that neither Senators Feingold and Casey have traveled to India before, and he urged them to see more of the country than Delhi. He described the U.S.-India relationship as much more than trade links and defense deals, but enjoying a special "empathy" that has increased as nearly every middle-class family has a relative in the U.S. These ties will create a lasting relationship that, Narayanan maintained, will not change.

The Role of NSA - - -

4.(C) Senator Feingold asked about the role of the National Security Advisor and how Narayanan can pursue national security goals given the decentralized nature of India's political system. Narayanan replied that the government had revived the position of National Security Advisor (NSA) in 1998 after a brief stint in 1990. The NSA, who presides over the National Security Council, derives authority from his association with the Prime Minister, a position that historically has held great influence thanks to the legacy established by Jawarharlal Nehru and Indira Gandhi, Narayanan explained. "In a sense, I live in the shadow of the Prime Minister," he stated, which allows him to cut across party loyalties and appeal to diverse interests.

Terrorism Challenge Requires Better Cooperation - - -

5.(C) Senator Feingold inquired about major security threats in the region, and particularly Narayanan's thoughts on the May 13 Jaipur blasts and Kashmir. Narayanan observed that the U.S. no longer ignores terrorist attacks that occur in India because it has adopted a more "cooperative angle" to face this common threat. He related that Indian intelligence has detected various targets, including southern and northeast Europe, Somalia and the Middle East, but not the U.S. Non-state actors will intensify their asymmetric warfare, he predicted, and pointed to the increase in "white recruits" detected by Indian intelligence in terrorist training camps along the Pakistan-Afghanistan borders. Those recruits will not be used against India or Asian nations, he NEW DELHI 00001489 002 OF 003 pointed out, adding that he has warned his counterparts of the development. He also related that India has found a "manifest attempt to get fissile material," though terrorist groups have not yet acquired any. However, he warned, they have "enough physics to fabricate a crude bomb beyond a dirty bomb."

6.(C) Narayanan perceived the lack of "adequate understanding" among intelligence agencies as the greatest weakness in the war on terror. "We keep our cards close to our chest, but it is extremely counter-productive," he lamented, recognizing that the fault is "equally shared." He cited the 2006 Mumbai blasts, which involved up to 11 countries, and at least seven distinct places where planning occurred. He noted that he made the pitch during his visit to Washington for greater information sharing, even of bits and pieces. "What might not make sense to you might make sense to me," he pressed. He indicated that he would raise intelligence sharing during the visit of the upcoming visit of the Director of National Intelligence. He also observed that jihadis no longer come from just the poorer segment of the Muslim population, but rather from the upper crust of a community that feels threatened in face of Muslim integration in India.

HUJI To Blame For Jaipur - - -

7.(C) Narayanan pinned the blame for the May 13 Jaipur explosions on the Harkat-ul-Jihad Islami (HUJI), a Bangladeshi offshoot of the Lashkar-e-Toiba (LET), noting that HUJI also masterminded the August 2007 blasts in Hyderabad, which employed similar triggers, packaging and devices as the Jaipur blasts. He noted that the Indian government had focused on threats to Maharashtra and Gujarat, but had no indication that Jaipur would be a target. No Nuclear Weapons, Nor Sanctions, For Iran - - -

8.(C) Senator Casey expressed concern about the uranium enrichment program in Iran and asked about India's policy on Iran's nuclear program. Narayanan pointed out that India and Iran have enjoyed civilizational links, India contains the second-largest Shi'ite population in the world, and any event in Iran could impact India because of their close geographic proximity. However, Narayanan maintained, the Indian government has "bitten the bullet" and held the view that Iran should abide by the Nuclear Nonproliferation Treaty (NPT), an unpopular position in India. During Iranian President Ahmadinejad's recent visit to Delhi, the Prime Minister told him to that India expects Iran to behave responsibly, Narayanan related. However, Narayanan saw the U.S. and India diverging on the issue of sanctions. He explained that the Shia clergy are more "sophisticated and erudite" than their Sunni counterparts. At the same time, he added, the Shia have a tremendous capacity to absorb punishment. "Self-flagellation comes to them naturally," Narayanan commented. The imposition of sanctions punishes ordinary people, who then turn their anger outward, he said. Narayanan contended that encouraging Iran to join the mainstream would produce more results. "We are cautious about adhering to a broad attack on Iran, but we do not favor nuclear weapons in Iran," Narayanan clarified.

India To Play Down Recent Infiltration from Pakistan - - -

9.(C) Senator Casey recounted his recent visit to Pakistan, where he heard several promises about cracking down on border crossings. Should the U.S. put stock in these pledges, he asked Narayanan. Narayanan noted that under President Musharraf from 2004 to 2006, the Composite Dialogue moved forward and infiltration dropped. The political crisis in Pakistan in 2007 stalled progress, he noted. He said that he was "hopeful" the new leadership would continue to see dialogue as useful, and not just as "something that Musharraf did." The recent Foreign Minister meetings in Islamabad helped ensure that the new government would sustain the Composite Dialogue, Narayanan recounted. However, he regretted that infiltration and incidents have spiked recently. He related that the Indian government has played NEW DELHI 00001489 003 OF 003 them down and not lodged a formal protest, deciding instead to treat them as a "temporary aberration." He remembered that hostility between India and Pakistan had dropped to such an extent that Pakistan had at one time withdrawn some of its military from the India-Pakistan border in order to focus on the threats along the border with Afghanistan, but those forces have since returned to the Indian border.

Peace Deals With Terrorists - - -

10.(C) Asked by Senator Casey how India felt about the pacts signed between the Pakistani Army and tribal groups, Narayanan replied that the Indian government does not consider them conducive to peace. Instead, he stated, "they are out-sourcing terror." He acknowledged that the U.S. understands this stance, but the British seem to think that the peace deals are a good move. Instead, Narayanan cautioned, the deals will allow the tribal groups to re-energize by withdrawing the pressure under which they might have relented. Pakistan needs its army to hem those groups in, he stressed. Narayanan also advised the U.S. to fight the war on the ground and avoid an air war, which he doubted would work against tribal groups. Senator Feingold said that he shared Narayanan's concerns about the peace agreements.

11.(C) Senator Feingold related that, during his May 28 visit to Islamabad, Pakistanis refrained from using harsh words to describe India. Warmer relations would be a new development for most Americans, Senator Feingold noted. Narayanan recognized that the importance of building a secure and stable Afghanistan has exposed the U.S. to concerns that India has held for many years. This was an important shift in the U.S., Narayanan asserted.

Comment: Pakistan Relations Remain Positive - - -

12.(C) A week after External Affairs Minister Mukherjee visited Islamabad, the Indian government appears reassured by the new Pakistani leadership's stated desire to sustain the dialogue that Musharraf had maintained. Narayanan's description of the effort to downplay the growth in incursions clearly aims to give the new leadership in Islamabad breathing room. However, if India experiences another attack on the scale of Jaipur or several more weeks of heightened violence and infiltration activity on the border, the pressure will mount on India to show its displeasure in public.